F. Scott Fitzgerald once said there are no second acts in American lives. However, after having spent 20 years in the IT industry, serving in various roles from system administration to network engineer (10 of which have been in education), I’ve recently decided that my second act should be as a freelance writer covering the investor's view of the technology industry. My background in engineering gave me what I consider strong analytical skills. My 15 years of trading and investing gives me the experience to assess equities and appraise their value. I am a Warren Buffett disciple that bases investment decisions on the quality of a company's management, its growth prospects, return on equity and price-to-earnings ratio. I employ conservative strategies to increase capital while also keeping a watchful eye on macro-economic events to mitigate downside risk.

Walmart Is No Angel, But It's Not The Devil Either

The volume of hate mail that I’ve received recently suggests that I’ve lost a few friends. My mistake was saying something nice about Walmart in public. I was called a lot of things – many of which I am not able to disclose here. But suffice it to say, I don’t expect to make it on most readers’ list of holiday well wishes. Still, while I don’t think what I’ve said in Walmart’s defense was that egregious, I do feel an obligation to explain my point further- at least based on the responses, which suggests that I was misunderstood.

It seems in our constant need for revenge against Walmart and (for that matter) any big establishment, we often overlook the role that we play as adults that leads us to our circumstances. I wonder, is it the responsibility of Walmart or any corporation to serve as our moral compass? Is this the message we want to send to our children? For instance, Walmart is in business to generate a profit – a word that is often interpreted as awful. But I don’t know of any company where making money is not the objective.

This is a selfmade image from the english wikipedia. The photographer has uploaded it as GFDL (Photo credit: Wikipedia)

In Walmart’s situation however, revenues have not been that impressive. The company is coming off a quarter where it saw only 3.4% growth while traffic at its store arrived flat. What’s more, its comps arrived below its range of guidance. This is the metric that tracks the performance of stores that have been opened at least one year. Even more disappointing is that the company has not done well recently in terms of profitability, an area which saw its gross margins decline by 13 basis points.

In some companies, a performance such as this would be enough to prompt discussions of layoffs. Instead Walmart decided it was going to open its doors earlier on Thanksgiving day - hoping to generate enough revenue to help offset what might be an otherwise disappointing current quarter. My response – so what! Was this really that egregious of a decision? While I do appreciate there are other lingering concerns. Many of which have lead to the recent protests. Still, I’m also willing to consider that corporations have a responsibility to perform for their shareholders. Remember them? They are not asking for sympathy. But they do help infuse the company with capital that help make (in some instances) payroll as well as healthcare benefits.

As I pointed out in my recent article, Walmart was not the only retailer that decided to open its stores on Thanksgiving. Target, Kmart, Toy R Us, Best Buy and many other prominent outlets sought to take advantage of the Christmas shopping season a little earlier than usual. Each of these stores are fearing that the popularity of Amazon and its expanded offerings will eat into their foot traffic. This is a way to fight back. So the idea that Walmart is the devil for doing what many others are also doing is a bit unfair.

Bottom Line

While I do understand the labor complaints offered by Our Walmart, the union-backed group which helped organize the post-Thanksgiving walk-out, I worry that sometimes we might jump too quickly into conclusions without fully understanding both sides. Walmart is certainly not an angel in this situation at all. But I disagree at the smearing of the company’s name for doing things that the entire retail industry is known to do.

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“Why do we believe that that companies squeezing every penny out of employees, quality and consumers for their own pockets is ok?”

I never said that this was ok. But I think there are two sides to every story. The constant narrative that big business is always the enemy is incorrect. I wish to place more control in our hands and use this situation as an example to tell our young people of the importance of a good education. This is the only way to avoid having to be subjected to low wage employment. Nonetheless, our capitalistic system dictates what skill-sets are worth. This is why the minimum wage laws exist. McDonald’s don’t overpay their employees either. But somehow they can get away with it because “they love to see you smile.”

That’s forgetting that a lot of Walmart workers may be Millennials who have college degrees, workers who were displaced from other jobs, older workers let go because of ageism and single parents in the workforce after a divorce. Lack of ambition is not the only reason for a low-end job. The economy changed four years ago, bringing a new reality. Maybe your beliefs need an update? ;)

There are a lot of worthless degrees out there that their owners are struggling to pay the debt of obtaining. With Walmart jobs. ;) Smarter education and acquisition of skills is what’s needed; and I agree with you on improving one’s ability to produce income. The problem is the rules abruptly changed with the new economic reality and so many got the rug pulled out from under them. They should not be penalized while readjusting (for the ones who can readjust).

That being said, if we as a society appreciate the convenience these retail stores provide, we should not sneer at the workers who provide this service, thinking them stupid or lowly. We have admitted by our commerce that these concerns have value. Therefore their work to provide this value is valuable. Give them a freakin’ living wage. Profits are calculated after costs are subtracted. Reduce the top salaries and you reduce cost and increase profit.

This has socialism written all over it. I don’t think this method works. So essentially it’s ok to punish those that make more in order to create a “better society” – one that might eventually promote laziness and devalue education all together. What is going on now is not new. It’s only become more highlighted because of the proliferation of media. But I do agree with you that “smarter education” is more critical now than ever before. But I don’t think it is the responsibility of corporations to “lead” this Utopian concept. Perhaps it should be taken up with our government to raise the minimum wage laws. But I take exception to the idea that companies should be singled out individual and demands should be made that they “share the wealth.” That’s the wrong message to send to our youths.

Not abusing people to acquire financial (or any other kind of) gain is the message I teach my children. We have laws concerning workers’ hours and breaks. Is that socialism? We don’t use slaves or children to make a buck anymore, either. Are those laws socialism? Minimum wages are imposed, too. Are these acts of socialism, or protection? We have many laws to grant rights to individuals who would be taken advantage of by those more powerful. Individual freedom is not the freedom to hurt individuals. We recognize that the strong are to protect the weak, and we use the power of government and law to protect those who would otherwise be preyed upon.

There are many who don’t want their products with a too high human cost. That’s why there’s a lot of backlash against these companies. I make choices daily with my dollars, as do others. The bottom line won’t be if these corporations are right in keeping an unfair amount of the profits to themselves. It will be whether enough people even bother to shop there to keep them profitable. People need goods. If they don’t buy them at Walmart, they will get them elsewhere and the money and jobs move on.

You make a great point. Our local store has very few people that have stayed with Wal-mart for over 10 years and they have made their way up to a decent wage. They also fall under a rule that the company gives them 40 hours a week; where-as anyone new is given a “full-time position”; but the amount of hours at best is 32 per week! That means no overtime pay. You never get “time and a half”; but instead you get one (1) dollar per hour worked !!! So if you worked 8 hours, then you get your normal pay times 8 and then they give you $8 more !!! So- no time and a half like other employees that have worked for a longer time period. I never looked into where this cut-off started; as I was not even sure who would give you an honest answer about the policy.

According to CBS, Walmart’s profits were up 9% in the third quarter. In terms of calling out Walmart – the biggest retailer in the country – for “doing things that the entire retail industry” does: as my mother used to say – would you jump off a building just because someone else did? Your logic is flawed here. As the leading retailer Walmart sets a bar for the industry – and it is setting it way too low when it comes to how to treat employees.

All kidding aside, NO COMPANY has a moral obligation to “set the bar” for an entire industry since each company is bound by ethical and legal obligations to do the best they can for their own shareholders.

It doesn’t matter that YOU may “hate” all shareholders and view them as evil.

It doesn’t matter that YOU may think every corporation should sacrifice shareholder interests in order to “set the bar” higher for an entire industry (i.e. giving profits away to unions and paying unskilled workers more than the market is willing to allow…….all in the name of setting the bar for “social justice”).

Your own logic is flawed since they already tried that strategy in Europe and now they’ve wrecked the place.

I realize that you THINK Walmart has billions to throw around and still be successful but their business model is based on a “per store” basis and if they begin wrecking it on a “per store” basis then they’ll wreck it on a corporate level too.

If you really think that Walmart can pay the same unionized wages/benefits as other unionized retailers (without serious consequences) then why not ask yourself why every other unionized grocery store and retailer is having to cut way back on expenses and nearly going under.

If your argument was true then you could cite unionized retailers doing as good or better than Walmart. :-)

Wow. You must have a crystal ball because you seem to think you know me very well. You have attributed opinions to me based on pretty much no information. Not an example of good thinking. Don’t bother responding. I don’t continue dialogs with folks who “argue” in this manner.